MSHA imminent danger orders for violations by independent contractors will require stronger contract provisions.
As a result, it is essential that mine operators and contractors develop and examine their contractual relationships in an effort to protect their interests if they are held liable for the violations created by one another.
It is common knowledge that every operator is subject to the requirements of the Mine Act and has "primary responsibility" for preventing unsafe mining conditions. Courts have routinely concluded that MSHA may define an "operator" as the operator itself, the independent contractor, or both for purposes of enforcing the requirements of the Mine Act and, therefore, may cite any entity for an MSHA violation found during an inspection.
Courts have also held that a production operator can be held liable for MSHA violations created by its independent contractors, based on the understanding that the Mine Act assesses liability without regard to the individual operator's fault. Production operators may be found "jointly and severally liable" for the hazardous conditions created by their independent contractors even when they are not aware of the existence of a violation and are not supervising daily work.
The rationale behind this conclusion is that the operator has the primary responsibility of preventing the existence of unsafe and unhealthy conditions. The courts reasoned that an operator is generally in continuous control of conditions at the mine and is more likely to know the federal safety and health requirements. Courts have also concluded that an operator can be cited for independent contractor violations because the operator could otherwise evade its compliance responsibilities by using independent contractors for most of its work.
Courts have further noted that production operators possess ultimate authority over independent contractors, and that holding production operators liable for independent contractor violations encourages them to consider the safety records of the contractors before contracting with them.
McCarthy's decision adopts the D.C. Circuit's and Fourth Circuit's holdings that MSHA's decision on whether to cite a production operator, an independent contractor or both for independent contractor violations is "committed to agency discretion by law" and, therefore, is unreviewable by the commission or the appellate courts. (See Speed Mining, Inc., v. FMSHR; Twentymile Coal Co.). While Speed Mining and Twentymile both addressed MSHA's authority to issue civil penalty citations, McCarthy concluded that the courts' underlying rational was equally applicable to MSHA's decision to issue imminent danger orders.
The conclusion that MSHA's decision is not reviewable is based on long-standing U.S. Supreme Court case law, which has ruled that "review [of an agency's decision] is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion." (Heckler v. Chaney). McCarthy, as well as the D.C. Circuit and Fourth Circuit, held that the Mine Act and MSFLA's enforcement guidelines in the Policy Program Manual do not provide a meaningful standard.
Under these cases, MSHA's decision to issue an imminent danger order or penalty citation against a mine operator for independent contractor violations is unreviewable, even when MSHA departs from its own enforcement policies. Thus, an operator is foreclosed from requesting that the commission or the appellate courts review MSHA's decision-making for abuse of discretion or fairness, although the right is still retained to challenge the existence of the violation or imminent danger, and the proposed penalty.
Clearer and stronger contractual strategies can be used to protect both parties and reduce the likelihood that a citation will be issued. Liability from violations committed by other parties can be reduced by reviewing the contracts and ensuring that the following provisions are included:
* Require each party to comply with all requirements under the Mine Act and MSHA standards and regulations.
* Require independent contractors to issue a plan to the mine operator about how it will complete the work in a safe manner and comply with all MSHA requirements.
* Require the independent contractor to provide safety records and prior MSHA citation history.
* Require the independent contractor to train employees on how to comply with MSHA standards, and require it to provide documentation that such training has been performed.
* Require the independent contractor to create and maintain all required reports and documentation showing compliance with Part 50 reporting and recordkeeping requirements, and require it to provide documentation to the mine operator that such records are being created and maintained. Also require that the operator have the right to audit such records upon request.
* Require that each party correct any hazards or violations within its control regardless of whether identified by the independent contractor or the mine operator in a reasonable timely manner and at no cost to other party.
* Require each party to indemnify the other against MSHA citations or imminent danger orders issued as a result of the other's actions, including the cost of attorney's fees for defending such litigation.
The use of standard contract language in these situations may result in high-cost consequences even where each has a robust contractor safety and compliance program. Remember that contracts are intended to address disputes before they happen. If care isn't taken to account for these unique circumstances, it is inevitable that that goal will not be achieved.
Nickole Winnett is a senior associate in the Washington, D.C., region office of Jackson Lewis P.C. Breyana A. Penn is an associate in the Denver office of Jackson Lewis P.C. Both are members of the Workplace Safety and Health practice group.
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|Title Annotation:||LEGALLY SPEAKING; Mine Safety and Health Administration|
|Comment:||MSHA imminent danger orders for violations by independent contractors will require stronger contract provisions.(LEGALLY SPEAKING)(Mine Safety and Health Administration)|
|Author:||Winnett, Nickole; Penn, Breyana|
|Publication:||Coal Age (1996)|
|Date:||Nov 1, 2014|
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